U.S. oil and gas production continued to trend higher through April – a delayed response to very high prices in the middle of 2022 after Russia’s invasion of Ukraine.

But the fall in prices and drilling rates since late 2022 is set to reduce output in the second half of 2023 and tighten markets for both oil and gas later this year and into 2024.

Crude and condensates production from the Lower 48 states excluding federal waters in the Gulf of Mexico increased by 37,000 barrels per day (bpd) in May compared with April.

Production increased by 986,000 bpd (+10%) compared with the same month a year earlier, according to data from the U.S. Energy Information Administration (EIA).

Lower 48 production was running at the second-fastest rate on record and only 70,000 bpd below the previous peak of 10.52 million bpd in November and December 2019.

Experience shows U.S. production responds to a change in prices with an average lag of around 12 months, so near-record output in April 2023 reflects very high prices in the second quarter of 2022.